Let's discuss taxation, retirement, and social rights for long-term immigrants in Israel and Luxembourg. For anyone considering a long-term move, understanding these factors is crucial. Israel, with its vibrant tech scene, and Luxembourg, a financial powerhouse, offer contrasting approaches.
Indeed. Israel offers significant tax exemptions for new immigrants ("Olim Hadashim") for ten years on foreign income and assets. This is a considerable incentive. However, the local income tax is progressive, meaning higher earners pay a larger percentage. There's also VAT (around 17%) and National Insurance Institute (Bituach Leumi) contributions for social security and healthcare.
Regarding retirement in Israel, there are mandatory pension schemes, usually private plans linked to employment, supplemented by old-age pensions from Bituach Leumi based on contributions. The retirement age is around 67 for men and 62-64 for women.
Luxembourg, with its high GDP per capita, has a progressive income tax system, but also strong double taxation treaties beneficial to international workers. Social security contributions are substantial, funding a robust public pension system and universal healthcare. Retirement is generally at 65. Their social safety net is comprehensive, including unemployment and family benefits, and strong labor protections.
Israel offers initial tax breaks, then a standard progressive system. Luxembourg demands higher contributions but provides extensive public services and a strong social security system. The choice depends on prioritizing upfront benefits versus long-term security.
Navigating these systems requires patience. Israel's initial tax incentives are attractive, while Luxembourg's higher tax burden translates to high-quality public services. The best choice depends on individual income, long-term goals, and tolerance for paperwork.